Helix Resources Limited has announced a renounceable pro-rata entitlement offer to raise approximately $1.68 million, partially underwritten by Mahe Capital, aiming to fund key drilling and resource estimation projects.
- Renounceable pro-rata offer – 1 new share per 2 held at $0.001 each
- 1 free attaching quoted option for every 2 new shares issued
- Partial underwriting by Mahe Capital for up to $500,000
- Funds allocated to White Hills drilling and Gold Basin resource estimation
- Offer includes shortfall and underwriter option components
Entitlement Offer Details and Structure
Helix Resources Limited (ASX, HLX) has launched a renounceable pro-rata entitlement offer to raise up to approximately $1.68 million before costs. Eligible shareholders can subscribe for 1 new share for every 2 shares held as of the record date, at an issue price of $0.001 per share. Alongside each 2 new shares issued, shareholders will receive 1 free attaching quoted option exercisable at $0.002 each, expiring two years from issue.
The offer is partially underwritten by Mahe Capital Pty Ltd for up to $500,000, with sub-underwriting commitments from directors Kylie Prendergast and Kevin Lynn totaling $80,000. This structure provides a degree of certainty around the capital raising while allowing shareholders to maintain their proportional ownership and mitigate dilution.
Use of Proceeds and Strategic Focus
Funds raised will primarily support Helix’s exploration activities, with $400,000 earmarked for drilling at the White Hills copper-gold project in Arizona, USA, and $1 million allocated to mineral resource estimation programs at the Gold Basin Oxide Gold Project, also in Arizona. The remaining funds will cover general working capital and offer-related expenses.
This capital injection is timely as Helix prepares to advance its exploration programs, which are critical to unlocking value in its copper-gold assets. The company’s focus on these projects aligns with its strategy to build a robust resource base and progress towards development.
Offer Mechanics and Shareholder Participation
The entitlement offer is open to shareholders with registered addresses in Australia and New Zealand, with the offer expected to close on 3 September 2025. Shareholders may take up their full entitlement, apply for additional shortfall shares, sell or transfer their entitlements, or allow them to lapse. The shortfall offer will remain open for up to three months after the closing date, allowing further participation.
Shares issued under the offer will rank equally with existing shares, and the quoted options provide an additional opportunity for shareholders to increase their stake at a modest exercise price within two years.
Capital Structure and Dilution Considerations
Assuming full subscription, the offer will increase the total shares on issue by approximately 33%, from 3.36 billion to over 5 billion shares. The issuance of quoted options will also increase the number of options on issue, potentially diluting existing shareholders by up to 15.25% if all options are exercised.
Notably, the company has safeguards to prevent any shareholder, including directors and underwriters, from increasing their voting power beyond 20% as a result of the offer. Director Michael Povey has committed to taking up to 50% of his entitlement without increasing his current voting power.
Risks and Market Context
Helix’s prospectus outlines a comprehensive range of risks typical for junior mining companies, including exploration risk, funding risk, regulatory and environmental compliance, and market volatility. The speculative nature of the investment is emphasized, with no guarantee of future revenue or dividends.
The underwriting agreement includes termination events tied to market conditions and company disclosures, underscoring the sensitivity of the offer to external factors such as commodity prices and ASX market indices.
Shareholders and potential investors are advised to carefully consider these risks and consult professional advisers before participating.
Bottom Line?
Helix’s entitlement offer marks a pivotal step in funding its exploration ambitions, but subscription uptake and market conditions will be key to watch as the company advances.
Questions in the middle?
- Will the entitlement offer achieve full subscription or rely heavily on underwriting?
- How will exploration results from White Hills and Gold Basin influence Helix’s valuation?
- What is the likelihood that the quoted options will be exercised, impacting future capital?
- Could market volatility or commodity price shifts trigger underwriting termination?
- How will shareholder dilution affect institutional and retail investor sentiment?